- 10 - the extent it may create inferences regarding the existence of a profit motive in the earlier years.” Hillman v. Commissioner, T.C. Memo. 1999-255 (citing Hoyle v. Commissioner, T.C. Memo. 1994-592). “[A]ctual profits or losses in those and subsequent years have probative, although not determinative, significance in such evaluation.” Smith v. Commissioner, T.C. Memo. 1993-140. The fact that the taxpayer carries on an activity in a businesslike manner and maintains complete and accurate books and records may indicate that the activity is engaged in for profit. Sec. 1.183-2(b)(1), Income Tax Regs. Other indicia of a profit objective include carrying on an activity in a manner substantially similar to other activities of the same nature that are profitable, changing operating methods, adopting new techniques, or abandoning unprofitable methods in a manner consistent with an intent to improve profitability. Id. Gold mining and other similar speculative activities are different from most other business activities because they generally produce no significant income until a find is made, and then the income is earned in one lump sum. In Harrison v. Commissioner, T.C. Memo. 1996-509, this Court found that a taxpayer’s contemporaneous handwritten lists of expenses were sufficient records of his gold mining and treasure salvagingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011